By Nathan Boardman
Novice investors may feel overwhelmed when making their initial investment in tangible gold and silver.
Indeed, there have been instances where unscrupulous individuals have marketed metals with reduced purity or a lower amount of precious metal than advertised. Occasionally, it may be necessary to utilize specific tools or expertise in order to identify and uncover instances of deception. Additionally, there are various methods through which inexperienced investors can fall victim to fraudulent schemes.
Here, we uncover the five largest pitfalls to avoid. By taking these precautions, you can save valuable time and finances and avoid unnecessary anxiety for both yourself and your family.
Pitfall 1. Television Advertisements, Well-Known Personalities Endorsing Products, and Deceptive Marketing Tactics
If you tune in to any of the cable news channels, chances are you’ve seen commercials promoting the purchase of gold or silver coins, particularly for inclusion in a retirement account.
The companies behind the advertisements often employ a well-known public figure as their spokesperson and promote a straightforward investment in gold or silver. Nevertheless, once they have someone interested, they will attempt to persuade them to purchase additional coins that are labeled as rare, unique, limited edition, proof, or collectible (numismatic).
Regrettably, individuals who have been deceived into purchasing these purportedly unique coins, often due to the tactics of persuasive salespeople, might have to wait for many years, or possibly never, to see any profit from their investment.
Due to the exorbitant prices charged, which far exceed the true market value of gold or silver, metal prices frequently need to increase twofold to reach the break-even point.
The celebrities enlisted for these TV commercials might not even be aware that they are unwittingly involved in a deceitful scheme. Similar to numerous individuals, their knowledge of the precious metals industry may need to be improved to discern between favorable and unfavorable values.
Pitfall 2. Criminal Depository
Throughout history, there have been numerous instances of dishonest depository operators engaging in activities such as pilfering a customer’s storage account or failing to properly deposit the metal initially provided by the customer.
When storage customers eventually desire the return of their metals, these unscrupulous depositories can function like pyramid schemes. They successfully fulfill withdrawal demands until those demands surpass fresh deposits.
When metals are sent, there can be significant delays lasting weeks or even months. This raises concerns that the depository may not physically possess the customer’s metals. They are striving to obtain the necessary metals to fully satisfy the client.
It is advisable to exclusively purchase, sell, or store your precious metals with a well-known depository that has a robust public presence and positive ratings.
Pitfall 3. Individual Fraudsters
In recent years, numerous instances of fraudulent individuals and criminals have been observed within the precious metals market. The CIA, FBI, and NSA have all issued multiple public alerts regarding fraudulent groups and extremist organizations operating within this domain.
Particular fraudsters target vulnerable seniors, relentlessly contacting and pressuring them to purchase gold bullion bars or coins. They may even employ deceptive tactics, such as posing as a legitimate business, to obtain money or valuable metals… or to persuade individuals to exchange their valuable items for immediate cash.
Additionally, numerous methods of illicitly moving funds have been observed.
Occasionally, fraudsters might pose as the IRS, law enforcement, or another government agency and insist on confiscating valuable items. Although there have been instances in the past where the federal government has seized valuable metals, the likelihood of such an occurrence happening today is minimal.
Various sellers perpetrate another prevalent form of deception on the internet. They might dishonestly take the client’s payment and provide nothing in return or complete orders with counterfeit or impure metal.
The examples above highlight the significance of purchasing, selling, or exchanging goods through trustworthy online vendors.
Pitfall 4. Fake Dealers Who Are Unable to Deliver Their Products
There have been countless cases of fraudulent sellers who claim to offer valuable metals but fail to deliver them. Instead, they keep the funds for themselves.
Here are some indicators to be cautious of…
- Freshly developed websites.
- Businesses are offering their products on well-known online auction platforms without any verified record of transactions.
- Sellers located in another country.
- Websites that closely resemble and mimic the appearance and content of other companies despite not being affiliated with them.
- Sellers who exclusively prefer to be paid in digital currency or physical currency.
- Advertisements discovered on public forums.
When you purchase precious metals through an online platform, it is customary to expect the provision of tracking details for your shipment shortly after your payment has been processed. Extensive delays are a significant cause for concern.
Pitfall 5. Attempts to Break Into Homes and Thefts
Suppose you possess any quantity of bullion, particularly substantial quantities of valuable metals like gold bullion bars, gold coins, silver bars, silver coins, or even jewelry. In that case, it is advisable to refrain from openly boasting about it. Please refrain from sharing that information.
An intruder can gain entry into your residence while you are present. They may resort to using force or even making threats of harm in order to coerce you into surrendering your possessions.
A burglar will patiently bide their time until you are away, absconding with your valuable assortment of metals without resorting to direct intimidation.
There have been numerous instances of individuals who have a strong interest in precious metals being victims of theft.
To minimize the risk of theft or loss of your prized possessions, refrain from sharing images and videos of your valuable items on the Internet and avoid discussing your personal collection in public.
Acquiring valuable metals is an excellent strategy for establishing a personal reservoir of worth, safeguarding against the impact of inflation, and preserving wealth for extended durations. Possessing a substantial amount of it can give you a heightened sense of financial stability for the days to come.
